Oklahoma residents who produce their own energy through solar panels or small wind turbines on their property will now be charged an additional fee, the result of a new bill passed by the state legislature and expected to be signed into law by Gov. Mary Fallin (R).

On Monday, S.B. 1456 passed the state House 83-5 after no debate. The measure creates a new class of customers: those who install distributed power generation systems like solar panels or small wind turbines on their property and sell the excess energy back to the grid. While those with systems already installed won’t be affected, the new class of customers will now be charged a monthly fee — a shift that happened quickly and caught many in the state off guard.

“We knew nothing about it and all of a sudden it’s attached to some other bill,” Ctaci Gary, owner of Sun City Oklahoma, told ThinkProgress. “It just appeared out of nowhere.”

Because the surcharge amount has not been determined, Gary is cautious about predicting the impact it will have on her business. She has already received multiple calls from people asking questions about the bill and wanting to have solar systems installed before the new fee takes effect. “We’re going to use it as a marketing tool,” Gary said. “People deserve to have an opportunity [to install their own solar panels] and not be charged.”

“It is unfortunate that some utilities that enthusiastically support wind power for their own use are promoting a regressive policy that will make it harder for their customers to use wind power on their own,” said Mike Bergey, president & CEO of Bergey Windpower in Norman, Oklahoma, in a statement. “Oklahoma offers tax credits for large wind turbines which are built elsewhere, but wants to penalize small wind which we manufacture here in the state? That makes no sense to me.”

The bill was staunchly opposed by renewable energy advocates, environmental groups and the conservative group TUSK, but had the support of Oklahoma’s major utilities. “Representatives of Oklahoma Gas and Electric Co. and Public Service Co. of Oklahoma said the surcharge is needed to recover some of the infrastructure costs to send excess electricity safely from distributed generation back to the grid,” the Oklahoman reported.

While I suppose there might be an argument for allowing utilities to recoup costs that are legitimately incurred from the practice of selling energy back to the grid, the idea of charging people extra for doing something that reduces their dependence on the grid while at the same time increasing the amount of energy available seems rather nonsensical. As the linked article goes on to note, these types of systems benefit energy companies by helping to reduce demand on the grid during peak hours and by increasing the amount of energy available during those periods. Given that, one would think that energy companies would want to encourage this sort of thing rather than backing measures like this which could potentiallly hamper it. It’s hard not to see this as an effort by the utility companies to hamper the competition that solar and wind generated energy provide them and, of course, to make sure that they still manage to make some money out of the deal.

Indeed, that seems to be exactly what’s going on:

As the use of solar power skyrockets across the U.S., fights have sprung up in several states over how much customers should be compensated for excess power produced by their solar panels and sold back to the grid — a policy known as net metering. Net metering laws have come under fire from the secretive American Legislative Exchange Council (ALEC), a group backed by fossil fuel corporations, utility companies, and the ultra-conservative Koch brothers. Forty-three states and the District of Columbia currently have net metering policies in place and ALEC has set its sights on repealing them, referring to homeowners with their own solar panels as “freeriders on the system.” ALEC presented Gov. Fallin the Thomas Jefferson Freedom award last year for her “record of advancing the fundamental Jeffersonian principles of free markets, limited government, federalism and individual liberty as a nationally recognized leader.”

Oklahoma “could be the first complete defeat for solar advocates in their fight against utility efforts to recover costs lost to DG [distributed generation] use,” writes Utility Dive. Net metering survived attacks in Colorado and Kansas and Vermont recently increased its policy in a bipartisan effort. Last year, Arizona added what amounts to a $5 per month surcharge for solar customers, a move that was widely seen as a compromise, particularly after ALEC and other Koch-backed groups got involved.

Of course, measures like this have nothing to do with “free markets, limited government, federalism, and individual liberty” and everything to do with crony capitalism.

Related Posts:

About Doug MataconisDoug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway.
Follow Doug on Twitter | Facebook

Comments

“The grid” isn’t some nebulous abstraction, it’s an actual and complex infrastructure. Should utilities not be permitted to recoup some of the costs of installation and maintenance of that infrastructure from solar panel installations that will use it?

Not surprising, utilities hate small, inconsistent generators. Yes it’s nice to have a lot of solar power on a hot sunny day to power all those ACs running- and then a single large cloud over Oklahoma City knocks the grid down 5% and leads to spikes the utility somehow needs to buffer.
Can’t wait to read how this is good for the people so, after all, if the Koch brothers are for it it’s part of the enlightened new right for the small guy.

There are people around here who have built their own solar units with tools that they usually already had and supplies from local home supply stores. Some buy kits that come with everything needed. Directions for building these come with the kits or are easily available at libraries, book stores, or on the internet.
Some developments will not allow these solar panels. My opinion is that if the utility companies want to buy power from these homeowners it should be at the same price/kwh as the homeowners pay to the companies. While some would argue that the power companies have a much larger expense and investment in their plants and grids, it can also be argued that the homeowner puts out a good some of money in initial costs. And the local utility company reported billions in profits for the first quarter of this year, all the while threatening people with cutoffs and bad credit reports if they are late on their payments.
Some states are considering putting a mileage tax on electric/alternative vehicles. People should get large tax deductions for any expense related to energy conservation.
So much for government encouragement of “green” energy. Its all politics and talk.
See gas vapor engine: car gets 400 mpg !! (fuel-efficient-vehicles.org) This is not an advertisement.

Of course, measures like this have nothing to do with “free markets, limited government, federalism, and individual liberty” and everything to do with crony capitalism.

Which guarantees that there will be no outrage, militia mobilizations, or protests from the extreme right wing, they will be too busy bravely defending important issues like gay marriage discrimination, freeloading cattle ranchers, intelligent design, and contraception.

Most utilities compensate at the wholesale rate for electricity on the market. The problem is the isolators and other equipment they have to install at each place to use the excess produced means they generally lose money buying back from individual homeowners for at least a few years.

See also taxes on hybrids. I think we’ll find that in the contest between policies that might, conceivably,reduce dependence on fossil fuels and increased revenues that more revenues will win every time. State and local governments are really hard up these days and the sources they’ve historically relied on (income taxes, property taxes, sales taxes) aren’t generating enough additional revenue.

No tax revenue is derived from solar power or wind power you generate yourself or the gasoline you don’t buy.

It’s not the competition they fear. It’s the fact that they can’t rely on it. The utilities are still required to have 100% grid power available when the customer wants it (and it’s an oppressively hot, no wind, cloud covered day). So the additional power doesn’t save them installation cost. Also, power stations work best at 100% capacity, anything less cuts energy efficiency. So the additional power doesn’t save them operating cost either. I don’t think they mind if all the solar powered systems would be buffering into their own batteries, thereby taking load reliably from the grid. But they don’t due to the forced “feed it to the grid” policies.
The political question is – do you make all customers bear the extra cost to benefit a “green” energy policy or do you punish the individual small producer to minimize overall cost?

I looked into going solar a while back, since I’ve got a 40x 24 south facing roof and could easily put up enough panels to supply all of my needed power, and then some. At that time, about 5 years ago, it was about as 40 year payback if I used 0 power company electricity, that was with the federal tax credits, but not figuring in what I could get from selling back power.

Today that is down to just under a 25 year payback, again not counting the $$ I’d get from the utility for selling back. But even that isn’t a good number, since it only includes initial cost, not maintenance, battery replacement and the other things that go with it. I’ll keep paying the utility.

(numbers based on wholesale solar’s pricing for the parts, and estimates I received from contractors on installation).

That sounds reasonable enough on the surface, Mikey, But let’s not forget that the utility is also reselling that surplus power to others, at a profit. I think some sort of compromise is in order. Arizona seems to have come close to that. An open-ended surcharge is a disaster waiting to happen.

This sort of concern will be mediated whenever we get around to installing “smart” grids that can regulate electricity demands more efficiently (like the FREEDM system transformers they’re trying to build at NC State), but till then I don’t see the issue with a surcharge that covers maintenance costs. It’s not like the surcharge won’t be eaten up by all the energy they’re selling into the grid anyway.

My opinion on this will honestly need to see the amount of the charge before I decide whether this goes too far from “honest need to recoup losses from independent non-constant sellers of energy” and into “milking a cash cow for being independent.”

@Bob Beller: Another thing to factor in is how much you might earn if you invested that money instead of buying solar panels. But I don’t think there would be any battery cost if you had a grid tied system, taking power from the grid when needed, selling excess back to them.

Another way to go is to lease the panels, also known as a power-purchase agreement. My niece and her husband did that. A company did the whole installation at no cost to them and their electricity bill is about half what it was. At the end of 20 years they can buy the system. They live in Massachusetts where the electricity cost are pretty high so I don’t know if it would work out so well where you live.

Utilities are “crony capitalism”? I hope this isn’t a general libertarian notion, because it’s going to look like hell with 3-4 sets of power, water, and sewer lines everywhere.

Sarcasm off, I think it probably should have been a general rate increase to cover the cost of added infrastructure myself. Spread across the entire population it would have reduced it to practically nothing and not discouraged the economic activity of this.

Out here, PG&E is obviously terrified of solar. I’m seeing solar instillations at a rate now which makes me think we are close to some kind of critical mass. Definitely seeing more light industrial installations as well as schools and parks to go along with residential.

PG&E, a once great company, has been a piece of crap for the last 20 years. In the mid 90s they cut emergency crews in half and assured everyone service would not be impacted. Right. Then of course there was the residential block in San Mateo they blew up a few years back. Senior executives are VERY well compensated now, and I guess these days that is what matters.

How is an electric car going to hurt the company that generates electricity? Who do you think is providing electricity to all of the charging stations? What will affect the electrical utilities is the requirement to operate a system that can provide 100% of demand, which will drives rates higher, while more people purchase solar/wind stations to lower the purchases from the utilities. The electrical companies will have to spend more money while selling less electricity. Thus, the cost per kW hour will go up. The hardest high customers will be those that cannot get away from the electrical utilities as easily as residential customers.

@Dave Schuler: If I install my own solar generation system, I would NOT be selling it back to any utility. In fact, my solar powered home will be completely cut off from the grid. I would NOT hand over my money to a utility simply because they might have ‘suffered’ sometime in the past by their own build out, which is NOT something I had a hand in creating nor deciding, so therefore,I refuse to pay them for their actions, nor do I have to.
This is a violation of the constitution as I am being forced to support a business model with my money, and against my will, and using government to be the executor of that act. The very source of the crime, comes FROM actions of government that is NOT in OUR best interest, which proves ‘they’ are no longer a representative form of elected authority and have become a power unto itself. In other words, a TYRANT.

If I had a choice of which electrical company I wanted to buy power from instead of the patchwork monopolies that currently exist, I probably wouldn’t have much problem paying a charge to install equipment needed to sell back power I produce.

Other than the emotionally weighted description of the evilscary Koch brothers, what is the issue here?

Clearly, having to pay a fee to sell power to the grid is wrong from so many different directions. The Kochs… being *libertarian* rather than evilscary conservative insiders, would naturally be all about a free market. So what’s the deal? Can anyone tell by reading this article? Why was support for what seems an obvious bad bill and *obvious* injustice and OBVIOUS crony-big money-etc. perversion… why was support overwhelmingly bi-partisan? Certainly not because the Democrat members of the state legislature are in Koch pockets, hm?

What happens when someone sells energy back to the grid? Is it a free-market transaction?

Reading this article sure doesn’t help anyone know that.

Who sets the price for energy which is “bought” from homeowners?

If it were a free-market transaction the power company would say that they could only buy the extra power for $X because they (like any other retailer) need to cover $X overhead and still get $X profit when they resell that same energy. That’s why, if you sell your organic apples to a grocery *they mark up the price*. If homeowners with wind or solar power production didn’t like the terms they’d refuse to sell the power back and cut production to meet their own needs without surplus. Problem solved.

So what’s the deal Doug Mataconis? Are you going to give us enough vital information to understand what is going on, or just enough information to be outraged in the ideological direction that you approve?

Goes to show you what living in an OLIGARACHY such as the United States of America.has become opposed to the Democracy we thought we lived in/under. OLIGARCHS such as the KOCH Brothers exert too much control over our lives and our countrys direction. This sur charge on solar power is only one example of it. When they get 86% of all legislation they proposed passed vs 18% or grassroots support or average citizen something is really wrong here..

I know a man who built a house on lakefront a few years ago. The plan for heating/cooling was to use the lake water with a heat pump as back up.. This was encouraged with a nice tax deduction for energy saving systems and was seen as a natural way to heat and cool. After getting started, here comes the state environmental agency and says no, even though this is a commonly used system that seems to work very well. Now that is what we are talking about. These varying agencies need to get their heads together and stop this kind of foolishness. Too many regulations that seem to be in direct opposites.

most neighborhoods ban solar panels for being an eyesore, but if there’s no zoning there then it’s all good. that there’s no dollar value to this upcoming fee makes most of the discussion pretty moot, a few bucks is no bfd (look at your cell phone/cable bill)- but anything substantial would be a call for concern.

@Moosebreath: Exactly. In Kansas, home to Koch Industries, the corporate tax rate and income tax rate have been slashed, individual property and sales tax not so much. Our governor just signed a bill doing away with property taxes on privately owned gyms and workout facilities, golf courses have long been exempt, because these poor souls have to compete with YMCAs and community centers. We are facing a budgetary nightmare.

@Rick DeMent: Here are a couple of things to note. Conservative sites, such as Hot Air, are denouncing this bill. And, while Oklahoma’s state legislature is overwhelmingly Republican, this bill passed the senate 41-0, and the house 83-5. So clearly, even if you assume that all the excused were Democrats, you still have only a total of 5 Dems who voted no, and a significant number who voted yes.

wow they are denouncing the bill? Well they denounce the actions of the banks too. Where are the protests, the demonstrations, the million bikers, truckers, bowlers march on Washington? Wake me when they start to muster armed thugs.

.. and people on the left will continue complaining about the War on Women, and Income Inequality, while Paul Krugman pulls in $25/month and Harry Reid’s son tries to build a solar plant.

And as soon as any of those groups mass armed thugs, start threatening 2nd amendment remedies or start talking about how the president should be impeached, please, by all means wake me up. Not even closet to equivalent … but good try, I know you have to try.

Unfortunately, the fundamental concepts of dignity, respect, equality before the law and personal freedom are under attack by the nation’s own government. That’s why, if we want to restore a free society and create greater well-being and opportunity for all Americans, we have no choice but to fight for those principles.

I’m shocked, shocked, to find that Mr. Koch’s words have absolutely no relation to his actions.
Freedom for the Koch’s is the freedom to sell you fossil fuels and pollute the air…and to do so totally un-regulated and un-taxed. But should you desire to create your own energy…no-way-Jose. Just more Republican hypocrisy.

@Jim M: Not a Democracy. It’s a Republic, or was originally designed to be. You are correct that it now more closely resembles an oligarchy, but you mis-identified the oligarchs. The oligarchs are those families which have essentially hereditary access to political office. That would be the Kennedys, Bushes, Fishes, Gores, Daleys, Dodds, etc.

You know, I’m not the guy who complains about thumbs-down, but for goodness’ sake, I was asking a question. Was it that bad a question? It’s not without cost for the utility to connect a private solar installation to the power grid. Maybe they should try to recoup that cost in ways that don’t include a surcharge, but 17 thumbs-down and only two responses to the actual question is kind of weak sauce, don’t you think?

@Doc Sheldon: Yes, Arizona’s net-metering surcharge costs the owner of the connected solar installation about $5 a month on average.

Another question to ask is whether it’s fair to have non-solar customers subsidizing the interconnect costs of the solar installations, because that’s essentially what is happening prior to the imposition of the net-metering surcharge.

@Mu:
The Power companies are BEING the battery for the system. A set of good batteries would run a homeowner $3000 or so, require regular maintenance, and provide about 8KW-Hrs of power – enough to get most homes through the night.. . These batts have to replaced every 8 years or so. That is over $30 a day. Any fee under that is a bargain to a homeowner. Not to mention that the Power company still has to run a power plant and can’t easily dial it back or dial it up quickly if a thunderstorm knows out a chunk of PV production, and that most net-metering programs essentially mandate that the power company MUST BUY and pay retail rates for the PV power generated – if they need it during peak demand or not. There is nothing wrong with charging customers for this service, and if the PV solar owners out there ( and I am one of them) don’t like it , they can buy their own batteries and disconnect form the grid entirely.

@Bob Beller: BS, I installed solar panels on my roof and the only thing the electric company installed was a disconnect switch and a meter that measures the electric flow both ways. I save on my monthly bill but still pay each month. During times of excess the power flows back to the transformer and my neighbors get to use it.

@Mikey: No downvote from me, Mikey. I agree with the poster upthread who thought that a tiny universal surcharge would have been a much smarter way to cover the marginal costs, though.

…because we’re talking about a public utility. This is not private enterprise, nor a free market, for very good reasons. Profits are already regulated, as are fee structures. The stupid part is not the charge to offset legitimate costs; it’s failing to charge the people who benefit (i.e. the general public) while penalizing the people who are benefiting everyone.

@KansasMom:
Republicanism can only lead to budgetary nightmares.
Witness today’s deficit, which is primarily made up of commitments made during the last Republican administration…Iraq, Tax Cuts, Medicare Part D.

Regarding paying for grid infrastructure, hey, that’s why there’s a monthly connection charge. I (and every other user of CL&P) pay $16/month to pay for grid upkeep, whether I purchase power or not. If that’s not sufficient, CL&P can ask for an increase. If they make their case to the regulators, they’ll get their increase. Problem solved.

“The grid” isn’t some nebulous abstraction, it’s an actual and complex infrastructure. Should utilities not be permitted to recoup some of the costs of installation and maintenance of that infrastructure from solar panel installations that will use it?

At some point, energy dependence dovetails with community resiliency and security. How about a bill that recognizes this fact, encouraging community resiliency as a public good, and promoting those who contribute toward that resiliency?

What’s that you say, “Government….promoting self-sufficiency?” What a concept.

The answer to your question is that the power company (or whatever entity is responsible for grid upkeep – sometimes it’s public) should be able to bring in enough money to pay for upkeep. The easiest way to do this is a flat connection charge. The utility company I use has one.

What’s BS is charging people who own PV arrays some sort of special surcharge. You either use the grid or you don’t. If you use it, whether you have solar panels or not, you should pay for its upkeep.

Solar is becoming cheaper by the year. Soon it will be competitive with fossil fuels and big oil is becoming a little scared. When big oil becomes scared out comes the cash. Oh yeah! Oklahoma is the most conservative state in the nation too that explains a lot.

Could you please substantiate that? According to the U. S. Energy Information Agency in 2018 solar, even including its substantial subsidies, will be significantly more expensive than wind or natural gas.

Solar is becoming cheaper by the year. Soon it will be competitive with fossil fuels and big oil is becoming a little scared.

While I’m a big supporter of solar, this is in no way accurate.

What many people seem to miss is that without a cost-efficient way of storing excess energy, it’s never going to compete with fossil fuels in areas that have a wide range of weather.

This variability is an issue with a lot of renewable energy sources. They are, for the foreseeable future, excellent sources of supplemental energy for most users. But its going to take a lot more development to get them to the point where they can actually compete with fossil fuels — at least for the general population.

How about you post up a draft of this proposed legislation. Maybe you can start by specifically defining this “dovetail point”. Is it the same for rural and urban areas? Will this be federal regulation passed in DC? Will it be state regulation out of 50 different State Assemblies? How about local resiliency laws.
Will violation of these laws bring about civil penalties or will they be criminal acts? Crimes against the public good of the community?

@Mikey: ““The grid” isn’t some nebulous abstraction, it’s an actual and complex infrastructure. Should utilities not be permitted to recoup some of the costs of installation and maintenance of that infrastructure from solar panel installations that will use it? ”

Yup. And there’s also the fact that the price of panels != the “price of solar.” That ignores installation costs (and the costs of other hardware, which may not be falling the way panel prices are).

When we had our system put in 2 years ago, ~50% of the price was labor and the other half was hardware (the vast majority of which was the price of the panels). Even if you project that panel prices will be cut by half, that translates into a ~25% reduction in the overall price of the project. Which is great! But not enough to get you to parity with, say, coal power (unless we actually accounted for the negative externalities of coal, of course).

The project was heavily subsidized by the state & feds, and it had to be. Even with those subsidies, it was a significant investment. Things continue to improve and I’m psyched about it. But let’s not go crazy here.

Which means that we can work on [the storage issue] now, while installing solar power.

I totally agree with this as an overall strategy.

My point is that statements like “Soon [solar] will be competitive with fossil fuels and big oil is becoming a little scared” are just not grounded in reality. Or a rather a realistic understanding of what “soon” means.

But not enough to get you to parity with, say, coal power (unless we actually accounted for the negative externalities of coal, of course).

Correct, but present accounting systems are not set up for those considerations. Especially since the negative externalities of existing fossil fuels are largely masked thanks to the fact that, in our current system, they are so indirect.

“The grid” isn’t some nebulous abstraction, it’s an actual and complex infrastructure. Should utilities not be permitted to recoup some of the costs of installation and maintenance of that infrastructure from solar panel installations that will use it?

Wow, I can’t believe that (as of this post) 35 people down-voted that observation.

One way or another this factor – people who install solar panels, opting out of the traditional power supply system – is accounted for in utilities’ rate structure. This is rate analysis 101.

without a cost-efficient way of storing excess energy, it’s never going to compete with fossil fuels in areas that have a wide range of weather.

The best proposal I’ve heard so far is to use solar at peak times to split water into hydrogen and oxygen using local high-efficiency direct-current systems. At off peak, or when the sun ain’t shining, you burn the hydrogen for power (and recapture as much of the vapor as you can). You can also transport the hydrogen, and export power that way.

This isn’t hard; it just requires infrastructure, which requires commitment. I’m not holding my breath.

Of course, there is no system even on the horizon that could replace fossil fuels for lightweight high-energy-density applications like flying an airplane. But we were talking about residential and commercial power…

In California all homeowners are required to have the digital meter. Work within the system people. My Husband and I have spent well in excess of $150,000 to sever the umbilical to outside energy and water providers. Our aquarium is the only thing the digital meter will calculate wherein our $22 per month is a bargain. If you sever all outside energy needs you stick out like an ostrich in a Trailer Park. Set up a one appliance feed to the meter and pay the absolute minimum to ensure there is a small but billable event to satiate the government. No more $800 per month electricity bills.

@al-Ameda:Wow, I can’t believe that (as of this post) 35 people down-voted that observation.

When 35 of 47 thumbs (74%) are red in response to a fair-minded comment I have to wonder if the polls are skewed.
Or maybe that many OTB Sages just aren’t interested in opinions that conflict with the party line.

@DrDaveT: Yes! One could probably build a whole lot of fuel cells and related controls for the cost of a peak firing gas plant to allay the concerns about renewable intermittency. That presumes a good distribution of fuel cells and renewables. IMO this infrastructure is sort of a prerequisite to the public goods of decentralization and lowering fossil fuel use. In a rational society the grid owners pick up this cost and charge it out to the ratepayers as infrastructure improvements.

@DrDaveT: Not really. If you go back to zeppelins and don’t mind loafing along at 65 mph rather than the speed of a jet, we’re getting to the point where some of the new solar cells are lightweight enough and efficient enough that coating your zeppelin provides sufficient power.

NASA has already been using solar cells + fuel cells to power high-altitude unmanned probes to stay up for 6 months or more checking layers of the atmosphere.

@Mu: It includes all sorts of sources including wind which is generally higher when cloudy T-storms roll in and slow the solar panel outputs. Charging people who wish to feed back into the grid does not affect people that simply generate and store their own energy in batteries to reduce how much they draw from the grid. Wanting to use the grid as basically a giant battery, where extra energy is fed into the grid and then drawn when needed, should have a small fee. Shouldn’t it? Saves people from having to add batteries and inverters to their solar or wind arrays.

You need the inverter no matter what. PV panels produce DC power. Batteries, though, yeah. If you want to go w/o the grid, you need very expensive (and space-consuming) batteries. A fee for grid usage is reasonable, though I don’t see why it should apply specifically to PV owners. Also, at least here in CT the subsidies for solar only apply to grid-tied systems. If you want to put in an off-grid system, no subsidy for you (also, at least for residential solar, the subsidies only apply to systems that are designed to produce 100% or less of your usage. If you try to put in a system that produces more than you use so you can profit, that won’t be subsidized).

@Bob Beller: when I spoke to my electric company they let me know real fast that I am responsible for all those expenses and they will not allow solar to connect until they inspect and are satisfied that I have installed everything they require.